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Mon, 16 Dec 2019 01:56 GMT

Turkey's Economic Crisis Prompts Japanese Builder to Abandon Sinop ‘Nuclear Project’


Selam Ramadan

Wed, 05 Dec 2018 11:03 GMT

Repercussions caused by a depreciating national currency and an ailing economic crisis cannot be overlooked in today’s Turkey, with the latest being the scrapping by Japan of a joint-nuclear power project, previously touted as a “model for Tokyo's export of infrastructure.”

Facing a devalued Turkish lira, the project's construction costs ballooned to 5 trillion yen ($44 billion), nearly double the original estimate, making it difficult for lead builder Mitsubishi Heavy Industries and its partners to continue with the plans.

Japanese financial daily, The Nikkei, also reported that the decision to pull out was due to heightened safety requirements in the wake of the 2011 meltdown at Japan's Fukushima Daiichi nuclear power plant.

Turkish journalist and environmental activist Ibrahim Gunel explained to 7Dnews that because Mitsubishi Heavy Industries, a multinational engineering company, is a private sector entity, it is unable to risk venturing into a project with negative prospects.

Many factors played a part in the project’s failure, Gunel confirmed in his statements.

“Turkey’s economic crisis of 2018 coupled with a plummeting national currency has complicated means for both acquiring and importing the raw materials needed to build the reactor,” Gunel said.  

Delayed construction costs, spanning nine to ten years, have made the project all the less appealing. In addition, Turkey has not yet managed to stabilise its economic and political status.  

High production costs, whereby 1 kW of electricity is priced at US$ 0.22 at best, also made the Japanese company reconsider the project, Gunel said.

In Turkey, there are currently two projects to build nuclear power plants, the first in Mersin, a city on the Mediterranean coast, while the second is in the city of Sinop on the Black Sea.

While Russian companies have been signed up to work on the Mersin reactor, a consortium of Japanese and French companies was to build four reactors in Sinop. Initial plans had construction beginning in 2017, with the first reactor coming online in 2023.

“Turkey does not need to build a nuclear reactor to produce energy. On the contrary, a surplus in electricity production, the mainstay of national industry, is not being acknowledged by official bodies,” Gunel revealed.

Interestingly, Gunel pointed out that Turkey's “insistence on using nuclear energy” is not a decision undertaken willingly by Ankara, but is “a result of US pressure aimed at creating a balance in the region with Iran.”

“America has encouraged both Egypt and Turkey to develop nuclear energy,” Gulen said, also referring to the US, a few decades ago, pushing Pakistan to obtain nuclear power plants to level out the playing field with India. The agreement for India's first nuclear power was signed in 1963.

Gunel warned against Turkish ambitions to possess weapons of mass destruction.

“It is not surprising to anyone that behind every nuclear reactor there is an intention to possess nuclear weapons, and Turkey is one of those countries that aspire to possess nuclear weapons,” Gunel said.

The Turkish lira has lost about 35% of its value against the dollar in 2018 alone, causing concerns over the central bank's ability to curb the double-digit inflation currently plaguing the nation.

Middle East Asia